Going Digital: What the IRS Paper Check Phase-Out Means for Your Business
Published: February 2026 | Reading Time: 4 minutes
If you run a business and still rely on paper checks for IRS refunds or payments, it’s time to take notice. The IRS is accelerating its transition to electronic payments—and the changes affect how you receive refunds and how you make payments.
Here’s everything you need to know to stay compliant, get your money faster, and avoid disruptions.
🔑 The Big Picture: Why This Matters
As part of Executive Order 14247, “Modernizing Payments To and From America’s Bank Account,” the IRS is phasing out paper checks for businesses to:
✅ Speed up refund delivery
✅ Reduce fraud and lost mail risks
✅ Lower administrative costs
✅ Improve payment tracking and security
Bottom line: Electronic isn’t just the future—it’s quickly becoming the only practical option.
📅 Key Timeline & Changes
✅ Refunds: Getting Money From the IRS
| Date | What Changes |
|---|---|
| After Sept. 30, 2025 | Direct deposit option added to most business tax return types |
| 2026 and beyond | Paper check refunds gradually phased out |
| Ongoing | Exceptions remain for hardships, legal requirements, or transaction types without electronic options |
💡 Pro Tip: Even if you filed a paper return, you can still request direct deposit for your refund—just provide accurate bank routing and account numbers.
💸 Payments: Sending Money To the IRS
Businesses now have multiple secure, electronic ways to pay:
| Payment Method | Best For | Notes |
|---|---|---|
| IRS Direct Pay | One-time payments | Free; pulls directly from your bank account |
| IRS Business Tax Account | Managing filings + payments | View history, schedule payments, update info |
| EFTPS | Scheduled/recurring payments | Ideal for payroll taxes; requires enrollment |
| Debit/Credit Card or Digital Wallet | Convenience | Processed by third parties; fees apply |
⚠️ Important: Federal Tax Deposits (like employment taxes) must be made electronically—cash, check, or card payments are not accepted for these.
🔄 What If You Process Bulk Payments?
Payroll providers, trustees, and fiduciaries handling high-volume transactions: you’re covered.
The IRS is expanding digital tools to support:
- Batch payments via EFTPS for third-party providers
- Secure, scalable options for fiduciaries and large organizations
- Updated applications and guidance rolling out through 2026
📬 Stay tuned: Additional guidance will be issued as new systems go live. Bookmark the IRS Electronic Payments page for updates.
🛠️ Action Steps for Business Owners
- Enroll in EFTPS (if you haven’t already) at eftps.gov
- Set up an IRS Business Tax Account to centralize your tax management
- Verify bank account details with your accounting team to avoid refund delays
- Update internal workflows to prioritize electronic payment methods
- Document hardship exceptions if your business has unique constraints (consult a tax pro)
❓ Frequently Asked Questions
Q: Can I still mail a check if I prefer?
A: Only in limited circumstances—such as when electronic options aren’t available for your specific transaction, or if you qualify for a hardship exception.
Q: Will this affect how I file my returns?
A: No. Filing methods (e-file or paper) remain unchanged. This update only affects payment and refund delivery.
Q: What if I make a mistake on my direct deposit info?
A: Contact the IRS immediately. Refunds sent to incorrect accounts can be difficult to recover.
🌟 The Bottom Line
The shift away from paper checks isn’t about inconvenience—it’s about building a faster, safer, and more resilient tax system. Businesses that adapt early will benefit from quicker refunds, fewer processing errors, and streamlined financial operations.
🚀 Ready to go digital? Start with one step this week: enroll in EFTPS or log in to your IRS Business Tax Account.
Disclaimer: This post is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your business.